Correlation Between Shore Bancshares and JP Morgan

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Can any of the company-specific risk be diversified away by investing in both Shore Bancshares and JP Morgan at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shore Bancshares and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shore Bancshares and JP Morgan Chase, you can compare the effects of market volatilities on Shore Bancshares and JP Morgan and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shore Bancshares with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shore Bancshares and JP Morgan.

Diversification Opportunities for Shore Bancshares and JP Morgan

  Correlation Coefficient

Poor diversification

The 3 months correlation between Shore and JP Morgan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shore Bancshares and JP Morgan Chase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Chase and Shore Bancshares is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shore Bancshares are associated (or correlated) with JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Chase has no effect on the direction of Shore Bancshares i.e., Shore Bancshares and JP Morgan go up and down completely randomly.

Pair Corralation between Shore Bancshares and JP Morgan

Given the investment horizon of 90 days Shore Bancshares is expected to generate 1.04 times less return on investment than JP Morgan. But when comparing it to its historical volatility, Shore Bancshares is 1.7 times less risky than JP Morgan. It trades about 0.32 of its potential returns per unit of risk. JP Morgan Chase is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  11,191  in JP Morgan Chase on May 14, 2022 and sell it today you would earn a total of  897.00  from holding JP Morgan Chase or generate 8.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Shore Bancshares  vs.  JP Morgan Chase

 Performance (%) 
Shore Bancshares 
Shore Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Shore Bancshares are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, Shore Bancshares is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Shore Price Channel

JP Morgan Chase 
JP Morgan Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JP Morgan Chase are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady basic indicators, JP Morgan is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

JP Morgan Price Channel

Shore Bancshares and JP Morgan Volatility Contrast

   Predicted Return Density   

Pair Trading with Shore Bancshares and JP Morgan

The main advantage of trading using opposite Shore Bancshares and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shore Bancshares position performs unexpectedly, JP Morgan can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in JP Morgan will offset losses from the drop in JP Morgan's long position.

Shore Bancshares

Pair trading matchups for Shore Bancshares

The idea behind Shore Bancshares and JP Morgan Chase pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center. Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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